Robert Halfon @Halfon4harlowMP explains what he means by a guarantee of an apprenticeship for young people
I've been campaigning on this for some time, and the reason is I think it would be an incredible offer to young people, not just because of the Coronavirus, but a serious offering that young people could get on that ladder of opportunity to get the skills, the training they need to get job security and prosperity at the very top of that ladder.
I'll come to the how in a bit, but I just wanted to give the setting. I always felt that everyone is focused on graduates. Of course, going to university is a wonderful thing, but you have to take out a whacking loan, not every graduate gets a good graduate job now, and that sadly is an increasing proportion who don't. So, I wanted to make sure that Apprentices had the same prestige as going to university, and I thought that an apprentice guarantee offered by the prime minister is a start.
Now, in terms of the how, which is very important:
1. Have the required qualification
First of all, you'd have to be clear that every youngster would have to have the required qualification.
2. Increase public sector targets
Secondly, I would massively increase the public sector targets for hiring apprentices.
3. Fund 100% training costs and first year salary for SMEs
I would use the three billion fund that the government have announced. So, this isn't new money, because it's always very easy to ask the government for more money. But there is a £3 billion skills fund that they've announced to fund all the training costs of non-levy payers. And if it stretched the sum of the wage costs, at least in the first year. Whilst you couldn't necessarily say to every single apprentice, one hundred percent, they will get that apprenticeship, if you create the right climate and conditions, you could make it become a de facto offering, if not de jure, because at the end of the day, you can't force an organisation.
4. Weight the Levy in favour of 16-19 year olds
In terms of the levy payers, I would say to the levy payers that if you hire a younger person from 16 to 19, you will use much more of your levy. If you don't if you are gaming the system or if you're just retraining existing staff, you will use a much lower proportion of your levy.
5. Degree Apprenticeships to be at least half of all University courses
And finally, in terms of the money that goes to universities and the loans and so on, I would make money to universities conditional on that at least 50 percent of every single course offered by each university around the country was as a degree level Apprenticeship.
At the moment there is an £800 million access fund, which is to promote, rightly, diversity and more people in disadvantaged groups. I would use the bulk of that to promote degree apprenticeships because I think that is the best way to get people from disadvantaged backgrounds to climb up that higher education ladder.
Dramatically transforming the education landscape
I think those are a number of measures, a lot more flesh on the bones that needs to be teased out in all this, but I think that would really dramatically transform the landscape.
Around all that there would be evangelization by the prime minister of the education sector, people in communities, people like you, Training providers in FE about how the goal of the government is to get to try and offer every single young person with the right qualifications and apprenticeship.
Do you envisage any issues or challenges around the notion of guaranteeing an apprenticeship?
No, it's quite the opposite. Why is it that, in Germany and Switzerland, you have something like 60 to 70 percent of students doing vocational education, they even start training people from the age of 14.
When I went there to see all this, I asked them, "Why are they doing it?" They'd say, "What do you mean, why?" They said, "We just believe in this".
I think we the only way to change these things is to change the culture of our nation, the only way we can build an Apprenticeship and Skills nation is change, sometimes you do have to have government acting. I'm not that kind of libertarian conservative, I don't believe in big government, I believe in good government. I do think government sometimes needs to use its levers in order to promote things that are for the good of society, and to help meet our skills needs.
If you take the levy payers, for example, I went to see last year a massive pet store in my constituency, and they have Apprentices all the way through their business now. They're levy payers, but in every part, so it isn't just retraining existing people or management degrees or whatever, they have someone on their board as an apprentice director.
Now, that didn't happen five years ago, in a million years, that behaviour has changed because the levy has made companies change their behaviour. Of course, the levy needs to be improved, and I get all that, but nevertheless, the principle of it is the right one.
The companies should invest in skills and apprenticeships, and many companies have behaved well, and actually are using the levy for a very good purpose, and offering young people this chance to climb that ladder of opportunity.
Should the National Retraining Fund be used to bring about culture change and incentivise behaviour?
So, there are two different funds here. There is the retraining fund that was announced by Philip Hammond that the governments are continuing. I'm not 100 percent sure of how much that is going to be. Then there is the separate £3 billion skills fund.
I think the retraining fund should be used for skills and, depending on how much that is, I think it should be used as a skills credit for all businesses, but predominately SMEs, where just as you have R&D for research and development tax credits, you should have skills tax credits for businesses to train their workers so it's about that lifelong learning.
As part of this apprenticeship guarantee for young people, should some wage subsidy element be introduced?
The levy payers, I would have it as it is, because I think big companies should pay the wages predominantly. People forget that actually it is just two percent of companies.
In terms of making an apprentice guarantee a reality, depending on how far the monies stretch, I'd definitely pay for the training, and if there was available money, I would possibly look at paying some of the first year, if not all of the first year of SME wages, but just the first year of an apprenticeship. I'd also look at ideas that are coming out from some of the FE sector, possibly changing the 20 percent requirements. If companies, because of coming out of the Coronavirus want their workers, they might be more likely to hire an apprentice if the first year of that Apprenticeship is spent predominantly with the training provider, or the college. Then the second year is in the firm.
I used to be very much against [the concept of wage subsidy], but I think the situation is so different now that we're going to need to incentivise business in every possible way.
Do you think that the whole program now should be recalibrated towards young people?
The whole Apprenticeship and skills program of the Government needs to have three aims:
- One is, does it help people in disadvantaged backgrounds climb up that ladder? I should never use 'that' word, social mobility, because it sounds like a Vodafone advert. So, does it help young people climb up that ladder?
- Second thing is, does it meet our skills needs?
- The third thing is, does it mean that this person who has got this, he or she has got this apprenticeship or skills training, is getting good outcomes, job security and prosperity, whatever background they come from.
Those are the three aims of a skills system, they have to be, especially with the fourth industrial revolution coming up. I think that should apply both for lifelong learning, for Apprenticeships, for any kind of skills training.
Would you extend the scope of the levy to help obviously pay for the guarantee or you've broadly content with the level it's at now?
Before the Coronavirus, I was thinking maybe you should extend it, but I think at the moment businesses are going to be struggling so much that we shouldn't hit them with any more levies, and we should actually be doing the opposite and giving them financial incentives to employ people.
I wouldn't at this point in time extend any levy, or I wouldn't impose extra business taxes on business in any other way either, I do think there is a difference between a levy and a tax. In a few years down the line, that's a different story, but I think certainly not the moment, we need to make the climate as business friendly as possible.
The complexity of quality assurance: Are you still of the view that the whole process needs to be streamlined?
This is an argument I lost when I was skills minister, I was overruled. I wanted it to be two maximum, it's a Spaghetti Western at the moment. I'm a small and beautiful person, I'd be very happy with Ofqual, and maybe IfATE or whoever it may be, but just one or two organisations. Keep it simple and I won't use the last word, but keep it simple, at the moment it's a Spaghetti Western.
Robert Halfon MP, Chair of the House of Commons Education Select Committee